Last week, Obama had issued an executive order preventing Ralls from owning four wind-farm projects near the Naval Weapons Systems Training Facility Boardman in Oregon used by US unmanned drones and electronic warfare aircraft.
The case reached the president's desk after the Committee on Foreign Investments in the United States (CFIUS) concluded that there was no way to address the national security risks posed by the Chinese company's purchases.
Issuing the order last week, the White House said: "There is credible evidence that leads me to believe that Ralls Corporation... Might take action that threatens to impair the national security of the United States."
The Treasury Department said CFIUS made its recommendation to Obama after receiving an analysis of the potential threats from the Office of the Director of National Intelligence.
It was the first foreign investment to be blocked in the US for 22 years. The block on the wind farms comes just weeks ahead of the November six US presidential election.
In an amended complaint filed on Monday in the US District Court in Washington, Ralls Corp. Alleged that Obama acted in "an unlawful and unauthorised manner" in issuing the order without providing "any evidence or reasoned explanation" for his decision.
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Ralls also contended that Obama and the CFIUS failed to give the firm "sufficient notice and opportunity" to be heard prior to prohibiting its acquisition of the wind farms.
The last time a president used the law to block a transaction was 1990 when George H.W. Bush blocked the sale of Mamco Manufacturing, a Seattle-based aerospace company, to a Chinese agency.
The US military has said it uses the Oregon base to test unmanned drones and other equipment for electronic warfare.